Digital ICs like microcontrollers, memory, and shift registers need a stable voltage source to make sure they work as expected.  Most circuits are designed with a voltage regulator to accomplish this stability.  In theory voltage regulators will vary their output to stay at a set voltage, regardless of how much current the load is drawing.  As a load draws a little bit more current, the supply voltage will begin to sag.  Conversely when the load is reduced the voltage may rise a little bit.  Regulators work to eliminate, well minimize, this change.

Full Tutorial:  Voltage Regulator Basics

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